In spite of the upgraded forecast for the image of the Slovenian economy, the Institute of Macroeconomic Analysis and Development (IMAD) warns that the government has to continue balancing the public finance.
The growth should continue in 2015 and in 2016. In 2015 the growth rate should increase by 0.7% (0.3 percentage points more than previously forecasted), and in 2016 by 1.3%.
The Slovenian gross domestic product (GDP) in the final quarter of 2013 has grown by 2.1% compared to the last three months of 2012, while during the whole of 2013 it decreased by 1.1 percent, i.e. substantially less than predicted.
GDP, revised and modified according to the season's influence and the number of working days, which are used for comparisons within EU by Eurostat, Statistical Office of the European Communities, has thus grown by 1.2 percent in the final quarter of the past year if compared to the third quarter, and if compared to the final quarter two years before, it has grown by 1.9 percent. The seasonally adapted data showed that GDP on quarterly level has been constantly growing through the past year.
The forecast by the European commission favourable
The European Commission has recently also improved the forecast for Slovenia. For this year the decrease of GDP in Slovenia is still expected (0.1 percent decrease), and next year the economic growth should be 1.3%.
The forecasts of other international institutions for Slovenia are not yet favourable, and mostly range at 1% decrease of GDP. The upgraded forecast by IMAD for Slovenia was expected, as in the end of February the Statistics Office published encouraging data for the final quarter of the last year.
The export will contribute most, the competitiveness of Slovenian companies will increase
Export will contribute most to this year's economic growth, driven by the positive economic happenings at the foreign markets. Vasle added that in the last year the competitiveness of the Slovenian economy has improved, along with its capacity for entering foreign markets. Domestic consumption will continue to shrink, but at a much slower pace. The labour market situation will continue to deteriorate, but less than last year.
The situation in crediting the entrepreneurial sector has worsened, both in euro zone and in Slovenia. "New loans did not flow from the banking system towards economy, but, just the opposite, the economy was reimbursing the banking system," Vasle explained and added that it will have negative influence to the economic activity in Slovenia.
IMAD expects the government to continue with fiscal consolidation during this year. He warns that the problems with real estate tax will require additional measures to be taken, which will however have adverse impact on the economic growth. He refuses to speculate on eventual additional measures, as the decision for them must be made by the government.
